Tag: Persuasion

There's a scene in the classic Paul Newman film The Sting, where Johnny Hooker (played by a young Robert Redford) tries to get Henry Gondorf (played by Newman) to finally tell him when they're going to pull the big con. His response tells the tale:

You gotta keep his con even after you take his money. He can't know you took him.

It's a good question: Why do we fall for it every time? Confidence games (cons for short) are a wonderful arena to study the Psychology of Human Misjudgment.

In fact, you could call a good con artist — you have to love the term artist here — a master of human psychology. They are, after all, in the game of manipulating people into parting with their money. They are so good, a successful con is a lot like a magic trick:

When we step into a magic show, we come in actively wanting to be fooled. We want deception to cover our eyes and make our world a tiny bit more fantastical, more awesome than it was before. And the magician, in many ways, uses the exact same approaches as the confidence man—only without the destruction of the con’s end game. “Magic is a kind of a conscious, willing con,” Michael Shermer, a science historian and writer who has devoted many decades to debunking claims about the supernatural and the pseudoscientific, told me one December afternoon. “You’re not being foolish to fall for it. If you don’t fall for it, the magician is doing something wrong.”

Shermer, the founder of the Skeptics Society and Skeptic magazine, has thought extensively about how the desire to embrace magic so often translates into susceptibility to its less savory forms. “Take the Penn and Teller cup and balls. I can explain it to you and it still would work. It’s not just knowing the secret; it’s not a trick. It’s the whole skill and art of presentation. There’s a whole narrative—and that’s why it’s effective.” At their root, magic tricks and confidence games share the same fundamental principle: a manipulation of our beliefs. Magic operates at the most basic level of visual perception, manipulating how we see—and don’t see—and experience reality. It changes for an instant what we think possible, quite literally taking advantage of our eyes’ and brains’ foibles to create an alternative version of the world. The con does the same thing, but can go much deeper. Tricks like three-card monte are identical to a magician’s routine—except the intent is more nefarious.

Psychology and show magic have more in common than you'd think: As Shermer says, there are many magic tricks that you can explain ahead of time and they will still work, and still baffle. But…wait…how?

The link between everyday psychological manipulation and show magic is so close that the magician Harry Houdini spent a good portion of his later life trying to sniff out cons in the form of mediums, mystics, and sooth-sayers. Even he couldn't totally shake free of the illusions:

Mysticism, [Houdini] argued, was a game as powerful as it was dangerous. “It is perfectly rational to suppose that I may be deceived once or twice by a new illusion,” he wrote, “but if my mind, which has been so keenly trained for years to invent mysterious effects, can be deceived, how much more susceptible must the ordinary observer be?”

Such is the power of the illusion. The same, of course, goes for the mental tricks in our psychological make-up. A great example is the gambling casino: Leaving out the increasingly rare exceptions, who ever walks in thinking they have a mathematical edge over the house? Who would be surprised to find out the casino is deliberately manipulating them into losing money with social proof, deprival super-reaction, commitment bias, over-confidence bias, and other tricks? Most intelligent folks aren't shocked or surprised by the concept of a house edge. And yet casinos continue to do healthy business. We participate in the magic trick. In a perverse sense, we allow ourselves to be conned.

In some ways, confidence artists like Demara have it easy. We’ve done most of the work for them; we want to believe in what they’re telling us. Their genius lies in figuring out what, precisely, it is we want, and how they can present themselves as the perfect vehicle for delivering on that desire.

The Beginning of a Con: The “Put-Up” & The “Mark”

Who makes a good mark for a con artist? Essentially, it could be anyone. Context trumps character. Konnikova wisely retracts from trying to pinpoint exactly who is easiest to con: The truth is, in the right time and place, we can all get hit by a good enough con man. In fact, con artists themselves often make great marks. This is probably linked, in part, to over-confidence. (In fact, you might call conning a con man an…Over-confidence game?)

The con artist starts by getting to know us at a deep level. Konnikova argues that con artists combine excellent judgment of character with a honed ability to show the mark exactly what he wants to see. An experienced con artist has been drowned in positive and negative feedback on what works and does not. Through practice evolution, he's learned what works. That's why we end up letting him in, even if we're on guard:

A con artist looks at everyone at that fine level. When it comes to the put-up, accuracy matters—and con men don’t just want to know how someone looks to them. They want to correctly reflect how they want to be seen.

What’s more, confidence artists can use what they’re learning as they go in order to get us to give up even more. We are more trusting of people who seem more familiar and more similar to us, and we open up to them in ways we don’t to strangers. It makes a certain sense: those like us and those we know or recognize are unlikely to want to hurt us. And they’re more likely to understand us.

There are a few things at play here. The con is triggering a bias from liking/loving, which we all have in us. By getting us committed and then drawing us in slowly, they also trigger commitment bias — in fact, Konnikova explains that the term Confidence Game itself comes from a basic trust exercise: Get into a conversation with a mark, commit them to saying that they trust you, then ask them if they'll let you hold their wallet as a show of that trust. Robert Cialdini — the psychology professor who wrote the wonderfully useful book Influence — would certainly not be surprised to see that this little con worked pretty frequently. (Maria smartly points out the connection between con artists and Cialdini's work in the book.)

The “Play,” the “Rope,” the “Tale,” and the “Convincer”

Once the con artist decides that we're a mark, the fun begins.

After the mark is chosen, it is time to set the actual con in motion: the play, the moment when you first hook a victim and begin to gain her trust. And that is accomplished, first and foremost, through emotion. Once our emotions have been captured, once the con artist has cased us closely enough to identify what it is we want, feeling, at least in the moment, takes over from thinking.

[…]

What visceral states do is create an intense attentional focus. We tune out everything else and tune in to the in-the-moment emotional cues. It’s similar to the feeling of overwhelming hunger or thirst—or the need to go to the bathroom—when you suddenly find yourself unable to think about anything else. In those moments, you’re less likely to deliberate, more likely to just say yes to something without fully internalizing it, and generally more prone to lapses that are outside the focus of your immediate attention.

As far as the context of a good con, emotion rules the day. People in financial straits, or who find themselves in stressful or unusual situations are the easiest to con. This is probably because these situations trigger what Danny Kahneman would call System 1 thinking: Fast, snap judgments, often very bad ones. Influenced by stress, we're not slowing down and thinking things through. In fact, many people won't even admit to be conned after the fact because they feel so ashamed of their lack of judgment in the critical moments. (Cult conversions use some of the same tactics.)

Now begins the “Tale”

A successful story does two things well. It relies on the narrative itself rather than any overt arguments or logical appeals to make the case on its own, and it makes us identify with its characters. We’re not expecting to be persuaded or asked to do something. We’re expecting to experience something inherently pleasant, that is, an interesting tale. And even if we’re not relating to the story as such, the mere process of absorbing it can create a bond between us and the teller—a bond the teller can then exploit.

It’s always harder to argue with a story, be it sad or joyful. I can dismiss your hard logic, but not how you feel. Give me a list of reasons, and I can argue with it. Give me a good story, and I can no longer quite put my finger on what, if anything, should raise my alarm bells. After all, nothing alarming is ever said explicitly, only implied.

This is, of course, the con artist preying on our inherentbias for narrative. It's how we sense-make, but as Cialdini knows so well, it can be used for nefarious purposes to cause a click, whirr automaticreaction where our brain doesn't realize it's being tricked. Continuing the fallacy, the con artist reinforces the narrative we've been building in our head:

One of the key elements of the convincer, the next stage of the confidence game, is that it is, well, convincing: the convincer makes it seem like you’re winning and everything is going according to plan. You’re getting money on your investment. Your wrinkles are disappearing and your weight, dropping. That doctor really seems to know what he’s doing. That wine really is exceptional, and that painting, exquisite. You sure know how to find the elusive deal. The horse you bet on, both literal and figurative, is coming in a winner.

The “Breakdown,” and the “Send”

And now comes the break-down. We start to lose. How far can the grifter push us before we balk? How much of a beating can we take? Things don’t completely fall apart yet—that would lose us entirely, and the game would end prematurely — but cracks begin to show. We lose some money. Something doesn’t go according to plan. One fact seems to be off. A figure is incorrectly labeled. A wine bottle is “faulty.” The crucial question: do we notice, or do we double down? High off the optimism of the convincer, certain that good fortune is ours, we often take the second route. When we should be cutting our losses, we instead recommit—and that is entirely what the breakdown is meant to accomplish.

A host of biases are being triggered at this point, turning our brains into mush. We're starting to lose a little, but we feel if we hang in long enough, we can probably at least come out even, or ahead. (Deprival super-reaction tendency, so common at the roulette table, and sunk-cost fallacies.) We've already put our trust in this nice fellow, so any new problems can probably be rationalized as something we “knew could happen all along,” so no reason to worry. (Commitment & consistency, hindsight bias.) And of course, this is where the con artist really has us. It's called The Send.

The send is that part of the con where the victim is recommitted, that is, asked to invest increasingly greater time and resources into the con artist’s scheme—and in the touch, the con finally comes to its fruition and the mark is completely, irrevocably fleeced.

The End of the Line

Of course, all things eventually come to an end.

The blow-off is often the final step of the con, the grifter’s smooth disappearance after the game has played out. Sometimes, though, the mark may not be so complacent. If that happens, there’s always one more step that can be taken: the fix, when a grifter puts off the involvement of law enforcement to prevent marks from making their complaints official.

Like the scene in The Sting, the ideal con ends without trouble for the con-man: Ideally, the mark won't even know it was a con. But if they do, Konnikova makes an interesting point that the blow-off and the fix often end up being unnecessary, for reputational reasons. This self-preservation mechanism is one reason so many frauds never come to light, why there are few prosecutions in relation to the amount of fraud really going on:

The blow-off is the easiest part of the game, and the fix hardly ever employed. The Drake fraud persisted for decades—centuries, in fact—because people were too sheepish about coming forward after all that time. Our friend Fred Demara was, time and time again, not actually prosecuted for his transgressions. People didn’t even want to be associated with him, let alone show who they were publically by suing him. The navy had only one thing to say: go quietly—leave, don’t make a scene, and never come back.

Besides the reputational issue, there are clearly elements of Pavlovian mere association at play. Who wants to be reminded of their own stupidity? Much easier to sweep it away as soon as possible, never to be reminded again.

***

Confidence Game is an enjoyable read with tales of cons and con artists throughout history – a good reminder of our own fallibility in the face of a good huckster and the power of human misjudgment.

While they often operate unnoticed, analogies aren’t accidents, they’re arguments—arguments that, like icebergs, conceal most of their mass and power beneath the surface. In arguments, whoever has the best argument wins.

But analogies do more than just persuade others — they also play a role in innovation and decision making.

From the bloody Chicago slaughterhouse that inspired Henry Ford’s first moving assembly line, to the “domino theory” that led America into the Vietnam War, to the “bicycle for the mind” that Steve Jobs envisioned as a Macintosh computer, analogies have played a dynamic role in shaping the world around us.

Despite their importance, many people have only a vague sense of the definition.

What is an Analogy?

In broad terms, an analogy is simply a comparison that asserts a parallel—explicit or implicit—between two distinct things, based on the perception of a share property or relation. In everyday use, analogies actually appear in many forms. Some of these include metaphors, similes, political slogans, legal arguments, marketing taglines, mathematical formulas, biblical parables, logos, TV ads, euphemisms, proverbs, fables and sports clichés.

Because they are so disguised they play a bigger role than we consciously realize. Not only do analogies effectively make arguments, but they trigger emotions. And emotions make it hard to make rational decisions.

While we take analogies for granted, the ideas they convey are notably complex.

All day every day, in fact, we make or evaluate one analogy after the other, because some comparisons are the only practical way to sort a flood of incoming data, place it within the content of our experience, and make decisions accordingly.

Remember the powerful metaphor — that arguments are war. This shapes a wide variety of expressions like “your claims are indefensible,” “attacking the weakpoints,” and “You disagree, OK shoot.”

Or consider the Map and the Territory — Analogies give people the map but explain nothing of the territory.

Warren Buffett is one of the best at using analogies to communicate effectively. One of my favorite analogies is when he noted “You never know who’s swimming naked until the tide goes out.” In other words, when times are good everyone looks amazing. When times suck, hidden weaknesses are exposed. The same could be said for analogies:

We never know what assumptions, deceptions, or brilliant insights they might be hiding until we look beneath the surface.

Most people underestimate the importance of a good analogy. As with many things in life, this lack of awareness comes at a cost. Ignorance is expensive.

Evidence suggests that people who tend to overlook or underestimate analogy’s influence often find themselves struggling to make their arguments or achieve their goals. The converse is also true. Those who construct the clearest, most resonant and apt analogies are usually the most successful in reaching the outcomes they seek.

The key to all of this is figuring out why analogies function so effectively and how they work. Once we know that, we should be able to craft better ones.

Don’t Think of an Elephant

Effective, persuasive analogies frame situations and arguments, often so subtly that we don’t even realize there is a frame, let alone one that might not work in our favor. Such conceptual frames, like picture frames, include some ideas, images, and emotions and exclude others. By setting a frame, a person or organization can, for better or worse, exert remarkable influence on the direction of their own thinking and that of others.

He who holds the pen frames the story. The first person to frame the story controls the narrative and it takes a massive amount of energy to change the direction of the story. Sometimes even the way that people come across information, shapes it — stories that would be a non-event if disclosed proactively became front page stories because someone found out.

In Don’t Think of an Elephant, George Lakoff explores the issue of framing. The book famously begins with the instruction “Don’t think of an elephant.”

What’s the first thing we all do? Think of an elephant, of course. It’s almost impossible not to think of an elephant. When we stop consciously thinking about it, it floats away and we move on to other topics — like the new email that just arrived. But then again it will pop back into consciousness and bring some friends — associated ideas, other exotic animals, or even thoughts of the GOP.

“Every word, like elephant, evokes a frame, which can be an image of other kinds of knowledge,” Lakoff writes. This is why we want to control the frame rather than be controlled by it.

In Shortcut Pollack tells of Lakoff talking about an analogy that President George W. Bush made in the 2004 State of the Union address, in which he argued the Iraq war was necessary despite the international criticism. Before we go on, take Bush’s side here and think about how you would argue this point – how would you defend this?

In the speech, Bush proclaimed that “America will never seek a permission slip to defend the security of our people.”

As Lakoff notes, Bush could have said, “We won’t ask permission.” But he didn’t. Instead he intentionally used the analogy of permission slip and in so doing framed the issue in terms that would “trigger strong, more negative emotional associations that endured in people’s memories of childhood rules and restrictions.”

Commenting on this, Pollack writes:

Through structure mapping, we correlate the role of the United States to that of a young student who must appeal to their teacher for permission to do anything outside the classroom, even going down the hall to use the toilet.

But is seeking diplomatic consensus to avoid or end a war actually analogous to a child asking their teacher for permission to use the toilet? Not at all. Yet once this analogy has been stated (Farnam Street editorial: and tweeted), the debate has been framed. Those who would reject a unilateral, my-way-or-the-highway approach to foreign policy suddenly find themselves battling not just political opposition but people’s deeply ingrained resentment of childhood’s seemingly petty regulations and restrictions. On an even subtler level, the idea of not asking for a permission slip also frames the issue in terms of sidestepping bureaucratic paperwork, and who likes bureaucracy or paperwork.

Deconstructing Analogies

Deconstructing analogies, we find out how they function so effectively. Pollack argues they meet five essential criteria.

Use the highly familiar to explain something less familiar.

Highlight similarities and obscure differences.

Identify useful abstractions.

Tell a coherent story.

Resonate emotionally.

Let’s explore how these work in greater detail. Let’s use the example of master-thief, Bruce Reynolds, who described the Great Train Robbery as his Sistine Chapel.

The Great Train Robbery

In the dark early hours of August 8, 1963, an intrepid gang of robbers hot-wired a six-volt battery to a railroad signal not far from the town of Leighton Buzzard, some forty miles north of London. Shortly, the engineer of an approaching mail train, spotting the red light ahead, slowed his train to a halt and sent one of his crew down the track, on foot, to investigate. Within minutes, the gang overpowered the train’s crew and, in less than twenty minutes, made off with the equivalent of more than $60 million in cash.

Years later, Bruce Reynolds, the mastermind of what quickly became known as the Great Train Robbery, described the spectacular heist as “my Sistine Chapel.”

Use the familiar to explain something less familiar

Reynolds exploits the public’s basic familiarity with the famous chapel in the Vatican City, which after Leonardo da Vinci’s Mona Lisa is perhaps the best-known work of Renaissance art in the world. Millions of people, even those who aren’t art connoisseurs, would likely share the cultural opinion that the paintings in the chapel represent “great art” (as compared to a smaller subset of people who might feel the same way about Jackson Pollock’s drip paintings, or Marcel Duchamp’s upturned urinal).

Highlight similarities and obscure differences

Reynold’s analogy highlights, through implication, similarities between the heist and the chapel—both took meticulous planning and masterful execution. After all, stopping a train and stealing the equivalent of $60m—and doing it without guns—does require a certain artistry. At the same time, the analogy obscures important differences. By invoking the image of a holy sanctuary, Reynolds triggers a host of associations in the audience’s mind—God, faith, morality, and forgiveness, among others—that camouflage the fact that he’s describing an action few would consider morally commendable, even if the artistry involved in robbing that train was admirable.

Identify useful abstractions

The analogy offers a subtle but useful abstraction: Genius is genius and art is art, no matter what the medium. The logic? If we believe that genius and artistry can transcend genre, we must concede that Reynolds, whose artful, ingenious theft netted millions, is an artist.

Tell a coherent story

The analogy offers a coherent narrative. Calling the Great Train Robbery his Sistine Chapel offers the audience a simple story that, at least on the surface makes sense: Just as Michelangelo was called by God, the pope, and history to create his greatest work, so too was Bruce Reynolds called by destiny to pull off the greatest robbery in history. And if the Sistine Chapel endures as an expression of genius, so too must the Great Train Robbery. Yes, robbing the train was wrong. But the public perceived it as largely a victimless crime, committed by renegades who were nothing if not audacious. And who but the most audacious in history ever create great art? Ergo, according to this narrative, Reynolds is an audacious genius, master of his chosen endeavor, and an artist to be admired in public.

There is an important point here. The narrative need not be accurate. It is the feelings and ideas the analogy evokes that make it powerful. Within the structure of the analogy, the argument rings true. The framing is enough to establish it succulently and subtly. That’s what makes it so powerful.

Resonate emotionally

The analogy resonates emotionally. To many people, mere mention of the Sistine Chapel brings an image to mind, perhaps the finger of Adam reaching out toward the finger of God, or perhaps just that of a lesser chapel with which they are personally familiar. Generally speaking, chapels are considered beautiful, and beauty is an idea that tends to evoke positive emotions. Such positive emotions, in turn, reinforce the argument that Reynolds is making—that there’s little difference between his work and that of a great artist.

Jumping to Conclusions

Daniel Kahneman explains the two thinking structures that govern the way we think: System one and system two . In his book, Thinking Fast and Slow, he writes “Jumping to conclusions is efficient if the conclusions are likely to be correct and the costs of an occasional mistake are acceptable, and if the jump saves much time and effort.”

“A good analogy serves as an intellectual springboard that helps us jump to conclusions,” Pollack writes. He continues:

And once we’re in midair, flying through assumptions that reinforce our preconceptions and preferences, we’re well on our way to a phenomenon known as confirmation bias. When we encounter a statement and seek to understand it, we evaluate it by first assuming it is true and exploring the implications that result. We don’t even consider dismissing the statement as untrue unless enough of its implications don’t add up. And consider is the operative word. Studies suggest that most people seek out only information that confirms the beliefs they currently hold and often dismiss any contradictory evidence they encounter.

Remember Apollo Robbins? He’s a professional pickpocket. While he has unique skills, he succeeds largely through the choreography of people’s attention. “Attention,” he says “is like water. It flows. It’s liquid. You create channels to divert it, and you hope that it flows the right way.”

“Pickpocketing and analogies are in a sense the same,” Pollack concludes, “as the misleading analogy picks a listener’s mental pocket.”

And this is true whether someone else diverts our attention through a resonant but misleading analogy—“Judges are like umpires”—or we simply choose the wrong analogy all by ourselves.

Reasoning by Analogy

We rarely stop to see how much of our reasoning is done by analogy. In a 2005 study published in the Harvard Business Review, Giovanni Gavettie and Jan Rivkin wrote: “Leaders tend to be so immersed in the specifics of strategy that they rarely stop to think how much of their reasoning is done by analogy.” As a result they miss things. They make connections that don’t exist. They don’t check assumptions. They miss useful insights. By contrast “Managers who pay attention to their own analogical thinking will make better strategic decisions and fewer mistakes.”

***

Shortcut goes on to explore when to use analogies and how to craft them to maximize persuasion.

In March of 1933, Eudora Welty, then 23 and looking for writing work, sent this beautiful letter to the offices of The New Yorker. “It's difficult,” writes Shaun Usher in his introduction to the letter in Letters of Note, “to imagine a more endearingly written introduction to one's talents.”

March 15, 1933

Gentlemen,

I suppose you’d be more interested in even a sleight-o’-hand trick than you’d be in an application for a position with your magazine, but as usual you can’t have the thing you want most.

I am 23 years old, six weeks on the loose in N.Y. However, I was a New Yorker for a whole year in 1930– 31 while attending advertising classes in Columbia’s School of Business. Actually I am a southerner, from Mississippi, the nation’s most backward state. Ramifications include Walter H. Page, who, unluckily for me, is no longer connected with Doubleday-Page, which is no longer Doubleday-Page, even. I have a B.A. (’ 29) from the University of Wisconsin, where I majored in English without a care in the world. For the last eighteen months I was languishing in my own office in a radio station in Jackson, Miss., writing continuities, dramas, mule feed advertisements, santa claus talks, and life insurance playlets; now I have given that up.

As to what I might do for you— I have seen an untoward amount of picture galleries and 15¢ movies lately, and could review them with my old prosperous detachment, I think; in fact, I recently coined a general word for Matisse’s pictures after seeing his latest at the Marie Harriman: concubineapple. That shows you how my mind works—quick, and away from the point. I read simply voraciously, and can drum up an opinion afterwards.

Since I have bought an India print, and a large number of phonograph records from a Mr. Nussbaum who picks them up, and a Cezanne Bathers one inch long (that shows you I read e. e. cummings I hope), I am anxious to have an apartment, not to mention a small portable phonograph. How I would like to work for you! A little paragraph each morning— a little paragraph each night, if you can’t hire me from daylight to dark, although I would work like a slave. I can also draw like Mr. Thurber, in case he goes off the deep end. I have studied flower painting.

There is no telling where I may apply, if you turn me down; I realize this will not phase you, but consider my other alternative: the U of N.C. offers for $12.00 to let me dance in Vachel Lindsay’s Congo. I congo on. I rest my case, repeating that I am a hard worker.

The New Yorker, missing the obvious talent, ignored her plea before eventually correcting their mistake. Welty went on to win multiple awards including the Pulitzer Prize for Fiction in 1973 for her novel The Optimist's Daughter.

I get a lot of emails from people asking me about the psychology of persuasion. Learning about the ways people (honestly and dishonestly) influence you is one of the best things to learn early in life.

But it's never too late.

The go to book on the psychology of persuasion is Robert Cialdini's Influence. Cialdini has spent a lifetime researching the psychology of compliance.

The book highlights six principles of persuasion, which most commonly and effectively are used by compliance practitioners.

We all employ them and fall victim to them, to some degree, in our daily interactions with neighbors, friends, lovers, and offspring. But the compliance practitioners have much more than the vague and amateurish understanding of what works than the rest of us have. … It is odd that despite their current widespread use and looming future importance, most of us know very little about our automatic behavior patterns. Perhaps that is so precisely because of the mechanistic, unthinking manner in which they occur. Whatever the reason, it is vital that we clearly recognize one of their properties: They make us terribly vulnerable to anyone who does know how they work.

These principles work via near automatic response – a “nearly mechanical process by which the power within these weapons can be activated, and the consequent exploitability of this power by anyone who knows how to trigger them.”

The Psychology of Persuasion

1. Reciprocation
This principle suggests people will be nice if you are. Therefore, if you do something first, by giving them something or doing something nice for them, it is more likely to come back to you. The key is to go first. And, at least in this case, size doesn't matter. Something as small as a pen has been shown to influence people well beyond its monetary value.

Reciprocation is the basis of cashing in points, calling in a favor, owing other people one, etc.

The reason it works so well is that you have two choices, you either act in a socially approved way by giving in to a request or decline and face (perceived or real) shame. And we want to say yes because this is a way to avoid confrontation.

Reciprocation also works on multiple levels. We are more likely to trust someone who trusts us. We share secrets with people who share secrets with us.

One way to resist this is to refuse the initial favor or gift. Once you accept, it becomes a lot harder.

2. Consistency

Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment.

It's easier to get people to comply with requests that they see as consistent with what they've already said (especially in your presence.)

This is the basis for one of the best interview hacks, I've ever seen. If you ask people to state their priorities and goals and then align your proposals with that in mind you make it harder for people to say no.

If you start to see yourself as a devil's advocate, for example, you will reinforce that idea by acting like a devil's advocate.

Say less at work and you'll be more flexible when things change. Also, examine why you want to comply and if things have changed. And keep a decision journal so you can see how often you're wrong — there is no point holding on to bad ideas.

Once you’ve got a man’s self-image where you want it, he should comply naturally with a whole range of your requests that are consistent with this new view of himself.

3. Social proof

we…use the actions of others to decide on proper behavior for ourselves.

Ever wonder why TV shows use laugh tracks. It's so you know when to laugh. I'll let you sit on that one for a minute.

People will more likely say yes when they see other people doing it too. This is amplified in situations of uncertainty, where we look to others for cues on what we should do. This can be dangerous. If you are in an emergency, you might look around you for clues on what to do and how to act. Others, of course, might do the same thing. This is why, in an emergency, you need to give explicit instructions. You should always point to someone in a crowd, and say, you call 911. Point to another person and ask them to do something.

Cialdini writes:

In the process of examining the reactions of other people to resolve our uncertainty, however, we are likely to overlook a subtle but important fact. Those people are probably examining the social evidence, too.

Consider walking into a restaurant in a foreign city. You're starving and have no idea “what's good” here. Luckily, there happens to be a section of the menu labelled “most popular dishes,” and that's exactly what you're likely to order.

Social poof is not all bad. It's one of the main ways we learn in life. I've written extensively on this one before.

4. Liking
You prefer to comply with requests from people you like more than from people you don't like. Go figure. One way people exploit this is to find ways to make themselves like you. Do you like golf? Me too. Do you like football? Me too. Although often these are genuine, sometimes they're not. One way to get people to like you is to establish quick rapport.

This is the basis for Tupperware parties. Who can say no to a good friend?

You also like people more if they like you. This is why Joe Girard, the world's “greatest car salesman,” sends every customer a holiday card with the message “I like you.” And you know what, it works. People go back to him.

Oh, and by the way, I like you.

5. Authority
This relates to our tendency to be persuaded by authority figures, that is people who demonstrate knowledge, confidence, and credibility on the topic. Something as simple as informing your audience of your credentials before you speak, for example, increases the odds you will persuade the audience. Beware of those wearing uniforms or engineering rings as those are rather overt signs of authority.

We're taught from a young age to listen to those in charge. And most times this works out ok but sometimes it doesn't.

Consider this, the co-pilot is never supposed to let the plane crash no matter what, even in a simulator. The pilot, however, is the authority figure. So in simulators they've had the pilot do things that are so obviously wrong that an idiot would know that what he's doing would lead to a crash. But the co-pilot just sits there because the pilot is the authority figure and a meaningful percentage of the time the plane crashes.

6. Scarcity

It is easy enough to feel properly warned against scarcity pressures, but it is substantially more difficult to act on that warning.

We all want something other people don't or can't have. If you offer people something rare or scarce, they are more likely to want it.

I just bought a book off amazon and interestingly on the page, they said “Only 2 left in stock.” That's scarcity. I better order now, or I might have to wait. And I don't know about you but I really don't want to miss out.

What is the effect of advice on your behavior? Are you really using it, or just listening to it? What is its effect on your moods, attitudes, and expectations?

People generally are quite willing to be told what to do with their money by a confident, authoritative sounding source which supplements advice with plausible arguments. These arguments are almost never examined critically or challenged.

Morris claims we sometimes follow advice because it: (1) relieves us of having to make some very difficult decisions; (2) stimulates our greed; (3) reduces our uncertainty; and (4) reduces our anxiety and fear while building our confidence.

“Advisory services make use of more or less subtle devices to appeal to our needs and emotions. … There are several readily identifiable ways of engaging our attention:”

To be bullish when the general trend appears to be down is a powerful stimulant to our tendencies toward wishful thinking.

To be bearish when everybody else sees a continued rise is to awaken our worst fears.

If there is a surprising drop in the market, everybody takes a beating. There is a tendency to forgive the advisory services as a companion in misery. Everybody is human, and in the same boat. To miss a rise, however, is far more serious, and not as likely to be forgiven.

A generally bullish tendency is thus a good policy for an advisory service.

To talk about “strong upside moves,” “most rewarding commitments,” and “outstanding appreciation possibilities” is to make a discreet attempt to awaken our latent get rich quickly desires.

There is a “staunch conservative” disclaimer that “we cannot, of course, guarantee the future effectiveness of our recommendations, but OH BOY, look what we've done in the (recent) past.”

There are obvious methods of trying to enhance credibility. “We have been in close touch with top management,” or “based on our computerized, thirty variable, regression model, it would appear that …”

Along with a recommendation which seems to run counter to the prevailing opinion, an attempt is often made to project the image of the fearless, courageous, independent thinker.

“The point of raising these hypotheses,” Morris writes, “is not to discount advice, but to see the effects it is actually having on us.”

The core of his argument is that research on one's own plans, attitudes, and emotions is likely to make more of a difference than advice.

The thing that most distinguishes the amateur from the professional in financial operations is, simply, self-awareness.

Below are three excerpts from a great interview with Rory Sutherland on decision making psychology.

Understanding Human Behavior

That attempt to model economic behaviour as though it were Newtonian physics was responsible for many past mistakes. This is closer to weather forecasting than to conventional physics as a science. But it is still a science and can still make progress like a science. And the great news is that we are starting from such a low base. If our ability to understand and predict human behaviour only improves by a few percent a decade, the benefits will be immense. And even a tiny reduction in misdirected effort (by abandoning daft, ineffectual sunk-cost-plagued endeavours such as the war on drugs or, at a more modest level, badly conceived choice-architectures in a new range of cars) all can be economically transformative.

The Physical Fallacy

The problem we all face is “The physical fallacy”. All of us, even those the social sciences, have an innate bias where we are happier fixing problems with stuff, rather than with psychological solutions – building faster trains rather than putting wifi on existing trains, to use my oft cited example. But as Benjamin Franklin (no mean decision scientist himself) remarked “There are two ways of being happy: We must either diminish our wants or augment our means – either may do. The result is the same and it is for each man to decide for himself and to do that which happens to be easier.”

There is no reason to prefer one solution over another simply because it involves solid matter rather than grey matter. This is an interesting area where the advertising industry and the environmental movement (rarely seen as natural bedfellows) sometimes find common ground. Intangible value is the best kind of value – since the materials needed to create it are not in short supply.

Marketing and Advertising

If you need to understand why marketing and advertising (and reputation and brands) are important to the functioning of markets, Akerlof’s paper “The Market for Lemons” is essential reading. So too is his excellent and underread book “Identity Economics” written with Rachel Kranton. The problem is not with economics as practiced by great economists – it is the unquestioning adherence to the dumber assumptions of Basic Economics 101 as unthinkingly absorbed by the product of a thousand business schools.

You are particularly made aware of the pernicious influence of bad economics if you work in advertising. Even when advertising demonstrably works and is highly cost effective, people in finance and in the boards of companies don’t seem to like it very much. Since they have a mental model of the world in which everyone has perfect information, they have of course constructed in their heads a vision of the world in which marketing shouldn’t exist.